Newbie question. If I rent my house I have to pay income tax on rent received. How much can I realistically offset due to depreciation or other tax deductions? I’m trying to gauge whether renting my house out and renting another house for the same amount will have a net-negative impact, financially speaking.

Posting as :
works at
You are currently posting as works at

I break even (on paper) or have a NOL (on paper) most years which I carry forward to offset profitable years. I force it to show a profit so I don't get classified as a hobby by controlling spending less on improvements some years. If I didn't spend on improvements every year would be profitable with 50% margin.

like

+ Property tax, insurance, mortgage interest, and depreciation. The latter is typically what brings you to net zero on paper.

We typically write off property taxes, gardening services, cost of any repairs or maintenance, other supplies for the house, mileage when you visit the property, etc. and add in depreciation (value of property excluding land divided by 27.5). Still pay taxes on some income but much less with the deductions

like

The deductions are a little different if you’re living there and renting out rooms vs if you’re renting the entire house and living somewhere else. But definitely talk to a CPA to understand what deductions are available to you in either scenario.

Turbo tax is great when it comes time to fill in the boxes.

A good CPA will help you understand what deductions are common vs. which deductions might raise alarms, and often can help you understand how different decisions might play into your overall tax obligation.

I’ll slightly rephrase the question and then answer. I think you’re asking if it’ll have a negative impact to cash flow. When referring to the total financial impact, the value of the home(s) will be the largest driver.

It should not have a negative impact to cash flow. Assuming you have debt on the property, you should also be able to find “ways” to get an income-producing property to basically 0 taxable income, at least in the early years of the property.

I have a few rental properties in Pittsburgh (higher-cash yielding market) and I’ve never had an income tax liability.

Related Posts

What motivates you to start or keep up a side gig? Is it just having more income or a specific financial goal?

like

I have two mortgages, one at 3% and one at 4.25%. Is there any benefit to paying either of them slightly higher than the minimum payment requirement (ie, maybe like $200/month more)? Additional factors to consider, my HYSA currently yields 3% and I am looking to buy another property in about 2 years and would prefer to not sell the either of the two properties currently on mortgage.

like

Current Tenant Rent: $1075, Monthly Payment: $400 (with property management), Initial Repairs: $2-5K, Down Payment: $12K

At surface level, do these numbers check out?

like

Now that the rents are going higher and housing is not affordable. With wfh option is it good idea to love to ranch with house?

Anyone here invested or opted as primary living place outside of cities?

Cheers

like

Does it make sense to refinance now? Current rate is 3.62, bought in 2019. About 480k left on loan. Need some suggestions.

like

For people who recently refinanced, bought or is in the process of buying a new home, what APR did you get?

like

How did you get started with your personal investing in stocks? I am 26, F, have some money in savings, 401k, stocks and just started my own business albeit small. I’m extremely interested in real estate investing have been reading and listening to podcasts. Any advice?

like

Looking to move out of California, and considering buying a townhome in Atlanta for ~$650k. Any thoughts on the Atlanta real estate market?

like

Not mad that student loans being paused means I can use the money for Christmas. Are you still making payments during the pause? Or are you saving the money for something else. My christmas present to myself is a spa day!

like

We can help you in tax planning and getting tax refund upto 2.5 lacs.Let us know if seeking help/clearification.

like

Guys, what platform do you use to trade US stock?

like

What are your experiences with buying or selling homes on leased land... Is it really a secure investment, or could they just take back the land whenever they wanted?

like

Anyone with experience in the short term rental space willing to connect?

I was in the market for a first time home in New York but the market and rates got too out of hand. Recently pivoted to a few out of state options for an STR and would love to learn from someone who's set one up.

Thanks!

like

How to best calculate the loss of value(diminished value)to my car due an accident? Insurance agency quoted a really lower amount.

like

For a 2-year associate now tasked with senior-like roles such as reviewing and training, does anyone have advice on how to review individual hnw tax returns?

like

Hi Fishes,

Can anyone suggest some good Mutual funds to start SIP for 3 years.

like

I'm relatively new to stock market investments and have tried to build a balanced portfolio for the long term. Should I hold the stocks for long term or does it make sense to book profits in between ?

Good recommendations for realtors in LP/OT area? Apartment rentals. Thank you!

like

y’all doing too much on LinkedIn… comparing having a baby to paying off debt. Great accomplishment but wtf is this post??? It’s so long I’ll have to include second part in another photo

Post Photo
like

What do folks think about the Uber credit card? I already have CSR and citi double cash. Worth getting it?

like

More Posts

What's the compensation for Contract Senior Manager at PwC in Texas? Glass door has no information about this.

like

Is it okay to join a new team and say "I expect your Support to myself" when you know you're not joining as a lead to the team.??

T1: H/S
T2: W
T3: Booth/Kellogg
T4: Sloan/ CBS
T5: Tuck/Haas/SOM
T6: Darden/Stern/Ross/Fuqua
T7: Anderson/Johnson
T8: McCombs/Tepper/Goizueta/Marshall/Kenan-Flagler

like

Hi Everyone!

I am looking at hiring a Sr. Salesforce (Sales and Service Cloud) and Sr. Salesforce (Marketing Cloud) Consultants. They can be based anywhere in North America. If anyone is interested or knows someone who might be. Please shoot me a message or comment below.

PS - Open to Full Time Permanent opportunities or someone looking for contract work is also okay.

likeupliftinghelpful

Have an interview with Elliot management, anyone down to talk about what you know about the firm/ experiences?

likesmart

What are some of the Studio Works that we can do?

I recently joined citi. I have been given choice for to select superannuation as 13% of BS or 12500/- monthly or zero.

This is one time selection and not reversible.

I am already investing 1.5 lakh in 80C through SIP and EPF.

I need more detail about superannuation and is it beneficial or not?

Also is there any retirement age in IT field 🤔 (or in citi)?

like

Hi
If someone opted out and didn't joined Accenture AI 6 month back , does accenture reconsiders the candidature again ?

like

Transition manager with overall 12 years experience, looking for Transiton manager, project management or program management opportunities..

like

I've somewhat tipsy-ish decided I wanna say fuck it, I'm gonna move to LA and be an actor

like

What’s the salary range for Manager role with 14 YOE .NET in PwC AC Bangalore?

like

Folks, AC Kolkata employee here.
Will management approve my request to buyout half my notice period if i promise to serve the other half? Also, any idea how it will get calculated?

Need ur urgent help and advice on this.

like

Deloitte USI Can anybody share what is mentioned in resignation acceptance letter for PwC AC. Please mention wording or format,that would be fine. PwC Pwc AC Deloitte USI Deloitte

like

Anyone have experience in bringing over a blood relatives children as a dependent into usa? If so, which visa ? And what’s the process to follow

like

Anyone else finding it really hard to care about super bowl commercials this year? They feel like a relic from another time to me.

likesmarthelpful

Hike expectations for someone who got mid year promotion ?con to scon

like

Hi!Please I’m looking for scrum master or business analyst roles.. I’m interested if you have any opportunities in your companies

Any trust and estate attorney openings in Texas?

like

Hi All-
Need a suggestion. H1 maxing out in sept 2021.
Got a job offer from small consulting firm (<200 people) and they are ready to file my GC from day1. About to resign in next couple of weeks once I receive my h1 approval.
But Deloitte sent a notification that they are restarting Perm process. Currently with Deloitte - nothing has been filed. They have the JD and all the documents from my side but haven’t filed pwd yet. Stay or move out .?

like

How do you not directly or awkwardly request regular feedback on your work?

Feel like idk if I rock or I suck since all deliverables are just accepted

like

Additional Posts in The Real Estate Bowl

For those w investment property, how many of you self manage vs using property manager? This is my first condo, relative new build from 2018 and a family friend jus moved out. I would have self managed but am scared about squatting/evictions esp w Covid and the rent memorandums. Thinking of jus getting the property manager as I am new to this... Advice appreciated.

like

Current Tenant Rent: $1075, Monthly Payment: $400 (with property management), Initial Repairs: $2-5K, Down Payment: $12K

At surface level, do these numbers check out?

like

Now that the rents are going higher and housing is not affordable. With wfh option is it good idea to love to ranch with house?

Anyone here invested or opted as primary living place outside of cities?

Cheers

like

Does it make sense to refinance now? Current rate is 3.62, bought in 2019. About 480k left on loan. Need some suggestions.

like

For people who recently refinanced, bought or is in the process of buying a new home, what APR did you get?

like

Who is still in denial about a housing correction? The Fed just made another .75% increase. Powell said they won’t stop until inflation is 2%. He also said a recession would be better than the consequences of unchecked inflation. He announced he will bring rates to a “restrictive level” until “the job is done”. He said that labor demand needs to soften (ie: layoffs). He very explicitly said he wants to slash demand and that housing needs a “correction”.

like

Do you thank your tenants for paying the rent? A quick thank you text?

like

How did you get started with your personal investing in stocks? I am 26, F, have some money in savings, 401k, stocks and just started my own business albeit small. I’m extremely interested in real estate investing have been reading and listening to podcasts. Any advice?

like

Looking to move out of California, and considering buying a townhome in Atlanta for ~$650k. Any thoughts on the Atlanta real estate market?

like

NJ market - Cousin of mine who has >500 rental properties advised that over next 3 yrs it’s possible for me to get 3 multi-fams if I buy 1 every year for next 3 years, by doing FHA on the first so 3.5% down and then doing less than 10% down on the next 2 if I do it right. Everywhere I read not seeing how that’s possible. can anyone explain pls? Is there a hack that after getting the 1st owner-occupied prop, I don’t have to put more than 10% down on 2nd home, and on 3rd??

like

I'm early in my career, managed to save $30K to invest, and want to get my hands dirty with a rental property without too much risk (e.g. no HML/flipping). It sounds like that's a tall order in the NY/CT area given the prices, not to mention whether I'd be able to get a mortgage on anything below $100K, but I figure I'll give it a shot anyway. Any advice on what you might do in my position? Am I being crazy with this idea?

like

Anyone punched out of state 4-10 unit apt building? How did you find the listing?

like

Closing on my first home. Advice for anyone with student loans in administrative forbearance per the Cares act: once your offer is accepted have you student loan servicer put your account back in repayment status.

Accounts in forbearance, even administrative forbearance, are calculated at a higher monthly payment by the underwriter.

My fictitious debt to income ratio was too high for them to approve me, and it took seven days for my loan to be officially back in repayment. So just a heads up.

like

Interested in development. Any recommendations on how to get started? Are there any organizations that will fund any part of a development project?

like

We are renovating a condo and the previous owner had two Crane toilets (not sure how old, but functioning although seals are old according to our contractor). Back outlet flour mount ones are the only options for the building, and one toilet can cost $300-$500.

We are redoing all the bathroom tiles and walls and debating what we should do with the two toilets. Would resealing the toilets extend the use life? Or should we just replace the toilets? Any other recommendations? TIA!!

like

I bought a property with 5% down. If after a couple of years I decide to move and rent this out, can I buy another property to live in for 5% down or does it need to be 20-25% down?

like

How long did it take you to buy your first million dollar home? What were the steps you took to get there?

My dream neighborhood is 10 min down the road but entry point is 1.2m. Currently my house is worth around $550k

like

Any investors in the woodlands Texas for single family homes, rent looks good as per Zillow , good school district and houses are still affordable compared to Dallas and Austin

like

Best way to start wholesaling real estate?

like
like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the
Fishbowl app

See what’s happening in your industry
from the palm of your hand.

A phone with Fishbowl app

Scan your QR code to download
Fishbowl app on your mobile

Download app

Sign up for free to view this conversation on Fishbowl

By continuing you agree to Terms of Use and Privacy Policy

Already have an account? Log in

Sign up for free to continue using Fishbowl

By continuing you agree to Terms of Use(New) and Privacy Policy(New)
Messaging rates may apply

Already have an account? Log in

For account settings, visit Fishbowl on Desktop Browser or

General

Legal